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7.
7
• 72 operational frac sand
mines
• 20 in development
• 13 permitted
• 17 proposed
• Trempealeau County
moratorium on new
facilities effective August
30, 2013
• Most activeWI county
relative to frac sand permits
• 26 companies
• 4,733 acres
• Moratorium in effect for up
to one year, pending
environmental and ethics
investigations
Sand Mining and Processing -Wisconsin
Source: www.wisconsinwatch.org as of May 1, 2013
As of
5/1
Trempealeau
County Area
State of the Proppants Market

9.
9
Sand Mining and Processing - Illinois
Major facilities for key players (U.S. Silica,
Santrol/Fairmount, Unimin) and increasing number
of mid-tier and new sand companies
Key players are expanding existing facilities and
acquiring new sites
Well-positioned to provide high-quality Northern
White product at a lower delivered cost per ton vs.
WI/MN sand to
• Eagle Ford
• Permian
• Marcellus/Utica
To-date support from state government leaders for
expansion and new development projects
Increasing environmental protests from citizen
groups
State of the Proppants Market
Source: www.fracktracker.org

14.
14
#1 Key to Winning – Most Efficient Supply Chain
Mining Processing Rail
Load-out
Long Haul
Rail
Transloading
and Storage
Trucking to
Well
“Never shut down a well” – supply availability of quality product remains “given”
Total cost “down the hole” by the end customer will become more precise and accurate
• Logistics cost is the highest portion of total delivered cost – best freight and handling cost structure
• Hidden or soft costs at the customer will also drive sourcing decisions
Winners will turn the supply chain into a conveyor belt – smooth, predictable, synchronized
• Find ways to tighten relationship with customers – schedule synchronization
• Utilize supply chain technology to further improve their performance and increase efficiency
• Invest in strengthening supply chain teams
• Cash flow will move up the priority list for sand companies – Inventory management will become important
State of the Proppants Market

15.
15
#2 Key to Winning – LeverageWill Drive Further Industry
Consolidation
Mining Processing Rail
Load-out
Long Haul
Rail
Transloading
and Storage
Trucking to
Well
End customers will continue to mix in-sourcing and outsourcing
• Early in-sourcing driven by supply assurance and controlling own destiny
• Can outsource beat the most efficient in-sourcing?
• Will the end customers consider sand to be core competency?
End customers desire “Storefronts” – can choose between “Walmart andTarget”
• Allows them to focus on their core competencies
• Minimizes their inventory costs while maximizing their flexibility
Leaders understand the total cost structure with trade-offs and leverage the whole supply chain
Best
“Tier 1”
suppliers
will win
State of the Proppants Market

16.
16
What Will the Proppants Industry Look Like in 3 to 5Years?
Frac sand leads with significant growth forecast
• New fracking techniques and faster well completion for liquids
• New gas demand will drive gas drilling growth down the road
• Resin coated sand and ceramics not expected to grow significantly
• Price inflation coming later in 2014 and 2015?
“Survival of the fittest” supply chain – the evolution
will continue
• “Tier 1” supply base will further consolidate smaller players
• The best niche players will thrive as 2nd tier and in small plays
• Supply chain practices and technology flow in from other industries
• Continuous Improvement mindset required to win
Heavy focus on cost reduction will continue
• Cost and margin will continue to be rationalized – direct and soft
• Difficult to win without volume leverage
• Sand supply
• Unit trains
• High volume transload and storage capability
Will continue to be an exciting industry for the
foreseeable future!

17.
17
ThankYou!
For follow up questions and information, please contact:
Taylor Robinson, President
+1-508-982-1319 / trobinson@plgconsulting.com
This presentation is available at:
www.PLGConsulting.com
State of the Proppants Market